The 5 Best Investments in My Self-Directed IRA

For those that have taken the plunge and rolled their IRA over into a self-directed IRA, a number of investment options are now at your fingertips. The question then becomes: what should you invest in? While the answer is going to differ depending on your own personal interests and acuities, these are some of the most exciting options available.

#1. Real Estate

Real estate is hot right now and the market for the right kind of investor is fantastic. It’s going to take a willingness to get your hands dirty. There are a number of dilapidated or run-down properties that are not up to rental codes all across the country. But the property itself has never been more valuable. Anyone willing to restore the property to livable conditions can make a killing flipping it or renting it out.

IRA money can provide the starting capital to do this, especially when combined with a non-recourse loan. Non-recourse loans require that you only provide 35-50% of the money down. A savvy investor can use that to stretch their IRA capital across multiple properties.

#2. Business Equity

Investors looking to purchase equity in a business can make excellent returns to fatten their IRA. The one restriction is that the business must be a completely separate venture from yourself and certain family members. That also means that there are restrictions on your personal involvement in the business. You may also be required to pay UBIT (unrelated business income tax). You’ll want to make sure that a financial advisor or lawyer oversees the legalities, but a number of individuals are using their IRA to successfully invest in business equity.

#3. Private Lending for Real Estate Ventures

Any means of jumping on the real estate bandwagon right now is a smart move. This is largely because there is such a huge demand for housing and rental properties. It remains a huge need for many areas, so even those that aren’t willing to deal with restoring the properties themselves, overseeing the repairs, or dealing with tenants can still make a good amount of money simply lending to those who will.

#4. Cryptocurrencies

Despite their reputation for volatility, many believe that cryptocurrencies are the wave of the future. The reason for this is that the distributed ledger technology on which they are based provides a decentralized approach to preventing counterfeiting. While most cryptocurrencies are tied to the relative success of Bitcoin, many others are attempting to fix the many serious problems that Bitcoin has. Investing in these ventures through ICO’s is a high-risk high-reward prospect that, if successful, will pay off major dividends.

#5. LLC Shares

Investing in shares of LLCs provides an excellent opportunity for passive income. Again, it’s a matter of doing the research and vetting the company, but for those that want to take a hands-on approach to their IRA, it also provides an excellent opportunity to see steady returns. You’ll want an attorney to take a look at the operating agreement so that it doesn’t conflict with federal restrictions on IRAs, but if set up properly, it will give you the opportunity to earn a solid passive income.

What Are Trusts And Deeds?

Rich people hire asset protection specialists to protect and hide their assets. So do real estate investors who know their stuff.

You already know about the LLC and the protections the limited liability company gives you. If anyone tries to sue you and claim your assets, the LLC gives you some protection.

A legal website, a CPA or attorney who don't specialize in asset protection can how to start an LLC. But now everybody can find out about your LLC. So your assets aren't really protected in the event of a lawsuit.

How Does The Trust Help?

The protection you need is something you get through anonymous trusts.  As such, you can hold the LLC anonymously. Trusts are private documents, and you can use them to own the LLC. Nobody would be able to find out who owns your trust, nor would they be able to find out who the beneficiary is.

The ultimate goal of having the LLC is to hold the asset (the piece of property or real estate). The property has a deed that says who owns it. If your LLC is listed to the owner, everyone knows you own it.

That's your worst-case scenario.

A trust itself can actually be a title holder to the property. This keeps anybody from being able to connect your property to your company. So you have complete anonymity. Nobody can find out who owns your company, and nobody can seize your assets in a frivolous lawsuit.

Self-Directed IRA Investments in Cryptocurrency

At Royal Legal Solutions, we stay on top of all investment trends. One of the fasted growing trends today related to cryptocurrencies. Let’s take a look at this often confusing topic.

What is Cryptocurrency?

Cryptocurrency, in particular Bitcoin, was invented in 2009 created by Satoshi Nakamoto. In its most simplistic form, cryptocurrency is considered to be a digital currency that is used in virtual exchanges. While there are many types of cryptocurrencies available today, the most common to be used is Bitcoin. Bitcoin uses cryptography as a means of securing and verifying transactions. Cryptography is also used to control the creation of Bitcoins, and other digital currencies, through virtual databases that permit changes only when very specific conditions have been fulfilled.

Does the IRS Allow for Cryptocurrency Investments?

Current laws do not prohibit the use of cryptocurrencies. In fact, tax regulations from the Internal Revenue Service (IRS) do not dictate what you investments you can make with your retirement accounts, within the scope of allowable categories. (For example, your individual retirement account allows for investments into anything that could be considered stocks, bonds or mutual funds. Other types of retirement accounts allow for further options as well.) They do however prohibit two very specific types of investment activities:

Cryptocurrencies clearly do not fall into the life insurance category. With names like “Bitcoin”, there was some initial confusion regarding the collectibles classification. Because it is digital, and based on a 2014 notice from the IRS, rest assured that cryptocurrencies do not fall into the collectibles category either. Instead, the IRS identifies them as property, which is allowable under certain IRA plans.

Self-Directed IRAs and Cryptocurrencies

Cryptocurrency gains are well documented and come with potentially high-returns for your IRA. By turning a portion of your self-directed IRA (SDIRA) portfolio into a cryptocurrency investment is a modern way to further diversify your investments. (Please note, because cryptocurrency is still considered a fledgling investment, only a small percentage of your portfolio should be converted to help decrease risk and protect your net worth.) When it comes to taxation on your cryptocurrency investment, IRS property regulations apply. That means that investing in, through buys or sales, cryptocurrency will not prompt unrelated business income taxes or other similar taxes.

Find a Custodian

IRS regulations require the use of a custodian or trustee for a SDIRA. While you retain control of your SDIRA, the custodian can help you facilitate exchanges at your request and ensure you do not violate any tax codes while doing so. However, because of the complexities of such a new investment capital, not all firms will allow these kinds of investments. Finding a trusted and knowledgeable custodian will go a long way in simplifying your cryptocurrency conversion and investment process. The experienced professionals at Royal Legal Solutions can help. Not only have we worked with investors new to the cryptocurrency scene, but also we have extensive experience with SDIRA custodial services in general.

Cryptocurrency investments may not be for everyone. However, the experts at Royal Legal Solutions can help explain how they work as well as what options are available. Ultimately, the decision to invest is up to you as the account owner, but we are here to help you gain a better understanding of investment opportunities and the regulations you need to know before investing.

What Would You Do With $100,000 in Your Self-Directed IRA?

One hundred thousand dollars is a nice sum to have in your IRA, but let’s face it. It doesn’t go as far as it used to, and it’s likely to stretch even less by the time you’re ready to retire. Often the returns on conservative investments such as CD’s, money markets, and bonds barely outstrip the rate of inflation. Inflation provides a constant pressure on the value of your money, so it ends up being that if it’s not making a decent return, you’re actually losing money. For savvy investors, using their IRA creatively can result in huge returns.

Self-Direct Your IRA

Self-directed IRAs are becoming increasingly popular and for good reason. They provide IRA holders with numerous options and open up investment opportunities that traditional IRAs can’t. At the same time, they provide a unique advantage: IRAs are tax-deferred.

How can you turn your IRA into a serious investment vehicle?

There are a number of custodians that specialize in self-directed IRAs. It will cost more than a traditional IRA, but on the same token, it provides you with unlimited investment opportunities on which to cash in. In other words, it’s an expenditure that can show huge dividends.

So the first step is rolling your current IRA over into a self-directed IRA.

What Can You Do With More Control over Your IRA?

One of the best options available right now is real estate. In terms of houses, most folks know that it’s a seller’s market. But rental properties are appreciating in value as well. In fact, many housing markets are currently failing to meet the demands of renters. It’s a huge opportunity for developers, but it’s also a huge opportunity for individuals that are willing to renovate dilapidated properties.

This affords different kinds of investors different kinds of opportunities, and IRAs can provide the starting capital on which to make that journey.

One possibility that is often overlooked: non-recourse loans. These can be used to purchase a property with somewhere between 35%-50% of the money down. This allows those without $100,000 in their IRA to invest in a decent property or those with more to invest in several. Either can use the money generated by rent to pay off the remainder of the loan.
Alternatively, those that are looking for a passive way to earn can use the money to furnish real estate investors in the purchasing of property that can then be renovated and rented out.

Real estate is a hot market right now because the demand is higher than supply. Fixing up properties that have fallen into neglect is an opportunity to cash in on a market that has shown great performance over the past few years.

Don't Jeopardize Your Investment Portfolio

It’s a common cliché among investors that they are their own worst enemies. While it’s true that some investors shoot themselves in the foot by jumping on a bandwagon that’s headed for a cliff, it’s also true that many investors don’t. To use another cliche: they don’t put all their eggs in one basket.

What’s true about these clichés is that we tend to let our emotions guide us. Investment bubbles are said, for instance, to be the product of a certain kind of “euphoria” that manages to trump all caution and reason. Millions are lost and depression soon follows. Such is the nature of mania.

The question then becomes: how do we, as investors, manage these emotions that seem to guide us down blind alleys? Top investors practice the following.

They Don’t Chase Performance

Too many investors get caught up in the frenzy of recent strong performance. Take, for instance, the cryptocurrency rush. This is the most recent example. Millions of unskilled investors rushed to jump on a bandwagon that made major headlines all across the globe.
There’s nothing necessarily wrong with investing in cryptocurrencies, but rushing into the investment simply because there’s been a buzz around it is not likely to yield good results.

Here, the feeling that you’re missing out on something major (fear) is guiding the decision. But you can only know one thing for certain: you should have invested in Bitcoin when it was still under $1,000. Then when there’s a major buzz around it, sell it to someone who is themselves chasing performance.

They Execute a Master Plan

Investors that go in without a plan are playing a dangerous game. Investment is not analogous to gambling merely because both involve risk. Risk can be managed intelligently in an investment portfolio. A wise investment plan should address the following:

The Bottom Line

Top investors successfully manage the highs and lows. They do not make choices based on emotions. They do not chase the latest trends. They are not caught up in investment frenzies. They do not become overconfident. Instead, they build a solid investment foundation from which they can take calculated risks. Interested in how solid your foundation is? Contact one of our professionals today.

Understanding Living Trusts: Your Quick Guide To How They Work

Living trusts are an estate planning option that few individuals make use of. Fundamentally, a living trust acts in much the same manner that a will does. A revocable living trust, however, offers some options that a will does not.

In the most basic possible terms, a living trust is a legal container for property that is created by a trust agreement. The trust takes the title of various properties and assets. Control of those assets is granted to a trustee.

In the majority of cases, the trustee is the same individual that is funding the trust. This begs the most obvious question: why?

Understanding the Basics of Living Trusts

Why would someone create a legal document to give themselves control over property they already have control over?

The one major benefit of a living trust is that it names beneficiaries of your assets upon your death and can avoid the court system during distribution. The key factor that distinguishes it from a will is that it is designed to avoid probate.

The Benefits of Establishing a Living Trust

Why would you want to establish a living trust?

The Disadvantages of Establishing a Living Trust

Aside from the fact that living trusts cost money to set up, there are a number of things to bear in mind when establishing a living trust. Living trusts do not always avoid the problems they are designed to avoid, and there are legal complexities to the process that are not always obvious.

Transferring Assets to a Trust Means that You No Longer Own Them

It’s important to keep in mind that when a property or asset is transferred to a trust, the asset becomes property of the trust. For instance, if you were to transfer a car to a living trust, you might find it difficult to insure the car as a result, since the car is no longer in your name. This, in fact, makes it difficult to transfer certain kinds of assets into the trust.
Only when the titles of these assets are transferred to the trust do they avoid the probate process.

Living Trusts are Not Tax Havens

There are some people that are under the impression that living trusts allow assets to transfer tax-free. That isn’t the case. Assets stored in a living trust are not granted any kind of special tax consideration, either while the grantor is alive, or after the grantor has passed.

In addition, all assets in a living trust are considered “countable” for the purposes of qualifying for entitlements such a Social Security or Medicare.

Living Trusts are Not Creditor Havens

Assets that are placed in a trust are still subject to claims brought forth by creditors. In other words, living trusts don’t “shield” your assets from claims against the estate, either while you’re alive or after you’ve passed.

When Does a Living Trust Make Sense?

Not everyone will need a living trust. There are, however, instances in which having one makes a great deal of sense. Read on ...

Living Trusts can Avoid Probate Messes

Since probate is governed by state law, properties held across multiple states can be subject to any number of jurisdictional restrictions depending on where they’re held. While going through probate is not necessarily the end of the world, going through probate in multiple states can get relatively messy. In addition, there are some states that have particularly complicated probate laws. Properties held in California and Maryland are solid candidates for a living trust.

Florida is another candidate for a living trust. There are restrictions on who can serve as a personal representative for a descendant. With a living trust there, is no such complication.

Living Trusts Offer More Privacy

The one major advantage of avoiding probate is that court proceedings are a matter of public record. For those whom privacy is a major consideration, living trusts can be an ideal way to distribute your assets after you pass.

The Bottom Line

Living trusts are a legal vehicle that individuals use to pass their assets. They function like a will but have the advantage of avoiding probate when they’re drafted properly and when all assets have been transferred properly. For most people, a well drafted will is about all they’ll need.

For those with a lot of assets or assets spread across multiple states, a revocable living trust is a powerful legal tool that can streamline the process of distributing assets after death. Trusts have the advantage of being more difficult to contest. They are also easier to amend than wills. Update your living trust when it's needed and you can rest easy, knowing you're handling an important aspect of your asset protection strategy.

IRA Rollovers: Yes, Rolling Over Your 401(k) Into An IRA Is Smart!

Changing careers? Deciding what to do with retirement funds is going to be a primary concern. While there are a number of options available, many choose to roll these funds over into an Individual Retirement Account.

There are a number of good reasons for this.

What Exactly is a Rollover IRA?

IRA Rollovers can be deposited into an IRA from another retirement fund, for instance: a 401(k). Those who don’t already have an IRA can open one for the express purpose of rolling over funds from a previous employer’s retirement plan. Those who already have an IRA can simply roll over the money into the existing IRA.

The Benefits of an IRA Rollover

Many folks are content to let their 401(k) plans accrue money over time, and there’s nothing wrong with that option. Why would you fix something that isn’t broke? Well in this instance, you would not be fixing something that is broken so much as replacing it with something better.

What do we mean?

Those who have just switched jobs have a short list of options concerning their retirement funds. These include:

Cashing the funds out immediately is not advisable. While leaving the money in the original 401(k) or rolling it over into the new one aren’t bad options, there are a number of reasons why an IRA rollover is the best option on the list.

Rollovers Can Preserve Tax-Favored Status

Those who choose to cash out their accounts early are not only subject to a 10% early withdrawal penalty if they are under the age of 59 ½ but will also need to pay income tax on the balance.

By contrast, rollovers can preserve tax-favored status so long as they’re transferred from one trustee to another. In other words, the IRA will continue to grow tax-deferred until a retiree begins collecting on their investment.

IRA Rollovers Can Increase Investment Options

Some folks choose to leave the funds in their old plan alone or roll the funds over into a new employer-offered plan. There’s nothing wrong with this per se, but rolling the money over into an IRA can increase the number of options that are available to you. For instance, IRAs typically offer a broader range of investments. 401(k) plans, on the other hand, may be limited to a handful of mutual funds.

This advantage will contribute to a better investment strategy and can prove more lucrative in the long run.

IRAs Have Lower Fees

Generally speaking, employer-sponsored 401(k) plans typically have higher administrative fees than IRAs.

An IRA Centralizes Control of Your Retirement Monies

There might some good reasons to keep your old 401(k) open, particularly if you’re satisfied with the returns. On the other hand, it’s much more convenient to have one centralized location from which to manage all of your retirement funds. IRAs are easy to figure out and significantly reduce the complexity of managing separate accounts.
From one centralized location you can access:

Brokers Will Compete For Your Business

Brokerage firms are more than willing to offer incentives to bring your business to them. In some instances, this could even mean free cash. In other instances, you may be entitled to free trades. It’s certainly something to look into as you figure out how you want to invest your retirement money.

401(k) Plans are Subject to Rules an Individual Company Establishes

Every company has a great deal of wiggle room when it comes to setting up a 401(k) plan for their employees. IRAs, on the other hand, are subject to a centralized set of rules established by the IRS.

This is better for two reasons:

The Rollover Itself is Free

While there are other costs to consider, rolling over a 401(k) into an IRA is free. There will be transaction costs for individual investments and other costs to bear in mind, but setting up and rolling over the money is a relatively pain-free process.

The Bottom Line

The advantages of rolling over your 401(k) into an IRA far exceed the risks. It makes sense not because the other options are bad, but simply because IRAs are better for some. With more investment options to choose from, lower administrative costs associated with the account, a simple centralized location from which to access your retirement investments, and more transparency regarding how the fund operates, IRAs make the most sense  for your retirement plan.

Self Directed IRA Business Trust FAQs

Investing in an Individual Retirement Account (IRA) is a great way to start saving for your golden years. Whether you are interested in a Self-Directed IRA (SDIRA), 401(K), or other IRA plan, investment professionals at Royal Legal Solutions can help. Below is a list of the most frequently asked questions we receive from people looking to learn more about investing in their future.

General SDIRA Questions

While SDIRAs have been around for decades, they are not the most well-known means of saving for your retirement. As a firm that specializes in SDIRAs, Royal Legal Solutions is here to help you understand how these types of investment accounts work.

How is a SDIRA different from other retirement plan options?

IRAs, 401(K)s, and SDIRAs are all used to earmark funds you intend to use during your retirement. At their core, each is a vehicle that is used to promote savings and investments that become available to your upon retirement. The majority of these accounts allow for unhindered growth as the invested funds and their earnings are generally tax-deferred. Each allows for investments in publicly traded securities and derivations of them, including stocks, bonds and mutual funds. However, that is where a SDIRA distinguishes itself. SDIRAs allow you to invest in much more than that. These alternative assets, like real-estate, precious metals, and renewable energy, allow for you to have a much more diverse portfolio. IRAs and 401(K)s are typically held at banks, insurance companies, or general investment firms and managed primarily by investment professionals.

Investment firms that offer custodial management of your SDIRA, on the other hand, tend to specialize specifically in these types of accounts. Also unlike IRA and 401(K) accounts, you control every aspect of your SDIRA. The investment professionals who retain custodial-only access are simply there to ensure you do not unintentionally break rules set out by the IRS.

What is the typical timeline to open a SDIRA or 401(K)?

At Royal Legal Solutions, opening a new SDIRA or 401(K) is easy. On average, the account process can take between two days and three weeks. The main drivers that dictate this timeline are how you plan to fund your account and, if you have a current retirement plan, who the custodian is. Our investment professionals strive to make this process as easy and quick as possible. We know every day it takes to set up your account is another missed opportunity to grow your finances.

Does having a SDIRA make me more likely to be audited by the IRS?

Currently, the IRS cannot legally target taxpayers for audits based on the type of investment accounts they have. In 2015, the IRS began asking for additional information on IRA reports in the form of Form 5498. However, because not all investors digitally submit their reports and the IRS cannot presently support manual submissions, targeting SDIRA owners would be considered a discriminatory practice. While this may change in the future, a SDIRA will not trigger an audit.

My current CPA believes there is an incurred 39% tax if I switch to a SDIRA and has warned against doing so. Is this true?

Your CPA is likely not as familiar with the SDIRA process as a specialized firm would be. They may also be under the assumption that you are attempting to take an early distribution from your current IRA in order to fund your SDIRA. This is untrue. Opening a SDIRA is typically considered a custodian-to-custodian transfer of your current IRA. Because of this, the startup process and investments are non-reportable and non-taxable.

Funding My IRA

IRAs, the tax regulations that govern them and investment complexities can give anyone a headache. Our professionals are here to help make sure your IRA experience runs smoothly.

Can I claim all of my IRA contributions?

You can contribute to your IRA account. However, if you have an IRA account through your employer, you may not be able to deduct the total of your traditional IRA contributions due to IRS threshold constraints. The investment professionals at Royal Legal Solutions can work with you to help determine the best way to save you money while investing in your future.

How can I transfer funds into my new account?

There are two ways to roll funding between your accounts. For a non-taxable and non-reportable option, you can elect to make a direct custodian-to-custodian transfer from your old account to your new one. You may also opt for a distribution-and-rollover transfer. These events are reportable, but are not taxable when the old funds are rolled into a new account within 60 days of distribution from the previous custodian.

How long does a transfer take?

For the custodian-to-custodian option, a transfer may take between seven and twenty days. If you are considering a distribution-and-rollover method, it only takes a couple business days for your bank to transfer the distribution to your new IRA.

How do 401(K) rollovers works?

We will provide you with the necessary information you need to initiate a 401(K) rollover. As the plan owner, you must provide this information to your plan administrator to start the rollover process.

What is the difference between an indirect and direct rollover?

Indirect rollovers occur when the funds from your current plan are distributed directly to you. A 20% tax withholding fee will be taken from your total by your administrator. Once you deposit your distribution, you have up to 60 days to invest any percentage of those funds into your new IRA or 401(K) without an additional penalty tax. Direct rollovers bypass these taxes. With these, your current administrator issues your funds directly to your new plan.

Managing My IRA

Whether you are new to investing or just want expert assistance, Royal Legal Solutions keep our costs affordable to ensure your investment funds go where they are supposed to: towards your future.

What rules apply to an LLC I invest in?

If your investments include owning a percentage of an LLC, all transaction must meet IRA guidelines. When LLC returns are distributed to investors, including you,  they need to be issued at the same time and pro-rata.

How much can I contribute annually to my IRA?

Contributions to your IRA and 401(K) are subjected to annual limits as dictated by the IRS. For IRAs, if you are under the age of 50, your annual maximum contribution is $5,500. If you are 50 or older, your annual contribution is capped at $6,500. Simplified Employee Pension IRAs are different and have an annual limit of $54,000. The 2018 solo 401(K) contribution limit is $55,000.

What is a RMD?

RMD, or Required Minimum Distribution, is the lowest amount of money you are obligatory to withdraw from your retirement account once you reach the age of 70.5. (Roth IRAs differ. They do not require any withdrawals until after the owner has died.) Your RMD is calculated by the IRS-published life expectancy factor and your balance as of 31 December of the previous year. RMDs are calculated on an annual basis with the first one starting on 01 April once you turn 70.5. You are required to withdraw your annual RMD amount by 31 December every year.

Do I pay taxes on RMDs?

Yes, the account owner is taxed at their income tax rate when they withdrawal their RMD.

What if I fail to withdraw my RMD that year?

Regardless of whether the IRA is yours or you inherited it, failure to withdraw the designated RMD by 31 December will result in a 50% penalty fee.

What Real Estate Investors Always Forget ... And How It Costs Them 💸

As a real estate investor, you have to understand that lawsuits are a business. If anybody is looking to sue you, they’re looking to get your money.

A proper asset protection strategy keeps people from finding out what you own. If they follow through with a lawsuit, it limits what they can get from you.

More importantly, a great asset protection strategy exhausts their will and their resources to fight.

This keeps people from continuing with the lawsuit.

It gets them to settle early.

It gets them (in most cases) to stop the lawsuit before it even starts.

Lawsuits Targeting Real Estate Investors Are Big Business

Because lawsuits are a business, the attorneys who drive them have one job: to figure out how to get money out of the real estate investors they are suing.

An asset protection strategy dismantles their approach. It protects the assets from being seized by in a judgment. This person doesn’t believe that they are getting anything out of their investment in a lawsuit.

Lawsuits are only paid for in two ways: Either you pay an attorney to sue or the attorney takes it on contingency.

If someone can't find any assets on paper have no assets on paper, how much money should you be willing to risk for a judgment?

Moreover, there’s no attorney who is worth his salt that is ever going to take a case like that on a contingency. Contingency is free for the client. The attorney risks everything.

In addition, attorneys only accept cases when they are confident they can win and collect.

How Do I Protect My Real Estate Investments?

So, when you ask yourself, "how do I protect myself from a lawsuit?", what you should really be asking yourself is, "How can I make it seem as if I don’t own anything?"

You get a proper asset protection strategy. Start with our investor quiz and we'll take it from there. We'll make you look like you qualify for food stamps. Remember ... without an asset to seize, a judgement is worthless. How much money will someone risk for a judgement which is merely a piece of paper?

 

Should I Invest In Commodities?

Commodities are everyday essentials, but did you know they were also investment opportunities? From the fuel in your car to the steak on your dinner table, commodities are raw materials. If you want to diversify your investment portfolio, commodities can surely take care of that. But is it wise to actually invest in them? Let’s take a look.

Types of Commodities

Tradable commodities fall into one of four categories.

Precious metals, like gold, silver, copper and platinum, are among the most popular kinds of commodity investments. Energy, which includes things like crude oil, natural gas, and gasoline, as also popular investment choices. Livestock and meat are considered commodities too. Live cattle and pork bellies are examples of these. If meats aren’t your thing, you can invest in agriculture instead. Corn, soybeans, rice, cocoa, coffee and cotton are all possible agricultural investments. When learning these markets, get professional advice so you can make the best commodity decisions for your portfolio (for example, by getting a Self-Directed IRA for Precious Metals).

Types of Commodity Investments

You can invest in commodities in a several different ways. For some, buying the physical raw material, like gold bullions, is an easy way to invest. These items can be securely stored in an approved depository. For more experienced investors, using futures contracts or exchange-traded funds (ETFs) are ideal. After all, purchasing 300 gallons of crude oil isn’t exactly easy to store in your safe deposit box. A futures contract is an agreement to purchase or sell a specific quantity of an item at a pre-defined price at a designated time in the future. Hiring a professional to help manage your futures contract may be your best bet if you are a relatively new investor. Investing in commodity stock is also possible. Gold mining and grain stocks are popular choices today. You can also invest in a company that deals in commodities, like a heavy-equipment manufacturer who sells tractors to farmers.

Why Invest in a Commodity?

Commodities are often used to hedge your investment funds during periods of instability, inflation, or devaluation. They should not be your primary investment, but they certainly do help to enhance your portfolio. Commodity investments typically move in opposition of stocks. Stocks can plummet when economic instabilities arise. But, in times of economic hardship, while money may be sparse, everyone still needs food and energy. Long-term investments require significant amounts of money, time, and research. These are best left to professionals.

Royal Legal Solutions has years of experience with commodities and trade trends. Our investment professionals can help you with your investment decisions, navigating the world we live in through stocks, trades and more. However, for all of the effort put into them, long-term investments tend to work well with a patient buy-and-hold approach.

Because large-scale commodity investments use economies of scale and predetermined prices, even small shifts in values can have large impacts. Because of this, experts typically prefer investing in commodity stocks over the actual goods themselves.

Hedge Your Bets with Commodities

Investing in commodities can help protect your funds. Commodities are personal investments that take a bit of legwork to thoroughly understand. Whether you invest in a single commodity, a particular sector of commodities, or an array of different sectors – select options that make sense to you. Hiring a professional may be the best way to invest in commodities, whether you are buying the goods themselves of purchasing stocks.

The Benefits Of Tax Deferred Growth

Investing in your future may not seem ideal when you have bills to pay now. At Royal Legal Solutions, we understand the ups and downs of daily finances. However, using a tax-deferred investment strategy can help ensure you can enjoy your golden years as you wish. Below, we take a look at the benefits associated with tax-deferred investments and some of the best ways to build your “nest egg”.

Tax Lingo You Should Know

“Tax-deferred” does not necessarily mean you will never pay taxes. Instead, it refers to investment earnings that accumulate free of taxes. These “tax-free” investments and their returns are only taxed once you make withdrawals. Depending on the plan you pick, you have the option of paying taxes before investing instead of later when you withdrawal. But we will talk about that more in a moment.

The Benefits of Tax Deferred Investments

There are two primary benefits when it comes to tax-deferred investments, both of which primarily revolve around saving you money and reducing taxes.

Invest Now, Pay Later

First, by paying taxes later, your investment returns are allowed unrestricted growth. This means that the money that would be taken by taxes, stays in your account. The more money in your account, the more you can invest. With more investments comes a higher potential return.

Potentially Lower Taxes

Second, most investments are initially made prior to retiring. In general, the taxes collected from your employment wages are much higher than those that are levied against your retirement earnings. By default, most Americans earn less during their retirement years than they did while working. Whether working part-time, holding easier jobs, or relying on their “nest egg” – retirees are not typically working high-dollar 9-to-5’s. By waiting to pay taxes on your investment gains, you can potentially owe less than you would if you were taxed upfront.

Types of Tax-Deferred Vehicles

So how can you jump onboard the tax-deferred train and start increasing your retirement fund? Most people jump on the bandwagon in one of three ways:

Let’s take a closer look at the differences between these vehicles.

401(K)

A 401(K) makes for a great long-term investment strategy. Often offered by employers, contributions are made on a pre-tax basis. This means, not only are you investing in your future, but you are also reducing your taxable income. Many employers will match your contribution as well, increasing your investment capital. (Check with your employer. Some may require a certain number of service years from you before they fully match your contributions. Others may have a cap for dollar-to-dollar matching.) There is a catch with 401(k)s. Withdrawals made before retirement will be subjected to higher taxes than they would be if made later as well as an IRS penalty tax. In addition, most 401(K) companies will treat your withdrawal as a loan; you will need to repay the funds should you take a withdrawal before retiring.

IRAs

There are several kinds of IRAs available. Traditional IRAs tend to be a favorite of those grossing $200,000 or more annually. In fact, 64% of those with higher incomes have at least one traditional IRA. Contributions made to a traditional IRA are tax deductible in most cases. However, an early (or pre-retirement) distribution will subject you not only to higher taxes, but also to an additional penalty. Roth IRA contributions are made after taxes have been taken from your wages. As with traditional IRAs, your investments can grow tax-free. While post-retirement withdrawals are tax-free, the IRS makes a clear distinction when it comes to early disbursements. Your original contributions can be withdrawn at any time from a Roth IRA; distributions of earnings, however, are subject to income taxes and a 10% penalty tax. For those who elect to open a Self-Directed IRA (SDIRA), which can be either traditional or Roth, investments are also tax-deferred. Because you must have a custodian for a SDIRA even though you make your own investment decisions, make sure you hire a reputable investment professional who won’t take advantage of these specialized nature of these accounts. (Our investment professionals have years of experience.)

Deferred Annuity Contracts

An annuity contract is a deal between you, as the investor, and a life insurance company. In a deferred annuity contract, income payments from your investment are paid at an agreed upon future date, as either installments or a lump sum. There are two phases to a deferred annuity contract – the investment savings phase and an income phase. Deferred annuity contracts can have fixed or variable rates associated with them. Withdrawals from annuity contracts are a bit more complex than those of 401(K)s and IRAs. Annuity contracts are typically subject to a “surrender period”. Depending on the contract, investors may be required to wait many years before withdrawing money from their account. Should they pull money prior to the end of that period, they will have to pay a “surrender charge”. As with the 401(K)s and traditional IRAs, a 10% penalty is charged by the IRS if money is withdrawn before retirement and withdrawals are subjected to income tax rates.

Tax-Deferment and You

Tax-deferred investments are great for planning your retirement. Pre-tax deductions lower your taxable wages, giving you a bit of a savings upfront. By not paying taxes immediately on your investment returns, you are able to invest even more. This creates a potentially larger return as you approach retirement age. When you do make withdrawals during retirement, the taxes paid on them are lower as well. Whether helping you arrange annuity contracts or providing financial advice and investment support on your IRA, we are here to help.

5 Facts About Using Social Security For Retirement

Royal Legal Solutions can help you invest whether you are currently working or not. While your 401(K) or Individual Retirement Account (IRA) is a great way to save for your future, your social security benefits will help too. Franklin D. Roosevelt signed the “Social Security Act” into law. This Act, which set up a trust fund, created a systematic benefits program that would support retirees and their survivors. This Act was amended in 1956 to also include disability benefits. But there is more to Social Security than that. Below are five facts you may not know about social security.

1. The Social Security Trust Fund is Massive

In 2017, the Social Security Administration (SSA) reported that the Social Security Trust fund had a total reserve of $2.85 trillion. With the exception of the seven largest countries, this reserve exceeds the gross domestic product (GDP) of every other country in the world.

2. Social Security Supports Millions of Americans Every Year

The trust fund may seem massive, but it is all a matter of perspective. The number of Americans who are reliant on Social Security benefits at the end of 2016 may shock you. According to the SSA, 61 million Americans collected benefits from the Social Security trust fund. That equates to $911 billion in benefit payments in 2016 alone.

3. Social Security Benefits are Subject to Income Taxes

While Social Security benefits are indeed subject to income taxes, that was not always the case. An amendment in 1983 to the Social Security Act made benefits taxable. Today, different thresholds dictate what percentage of benefits are eligible for taxation. For those with incomes between $25,000 individually or $32,000 as a couple annually, 50% of these benefits are subject to income taxes. For households that earn more than $34,000 alone or $44,000 together each year, 85% is treated as taxable income.

4. The 35 Highest Paying Years of Your Career Dictate Your Benefits Paycheck

Your benefits are directly determined by the average of your highest earnings over a 35-year period. That means that minimum wage job you held bussing tables in high school likely will not affect how much you qualify for when it comes to your retirement benefits. Royal Legal Solutions wants to help you make the most of your golden years. When you invest with us, our experts can help make sure you can retire with more than just a social security check.

5. Benefit Adjustments No Longer Take a Congressional Act

For many years, benefits were only increased after an act of congress determined they would. That changed in 1975, however. Increases now occur automatically at an administrative level. (Thank goodness for that! Now you do not have to wait for Congress to hear, debate and rule on benefit increases.)

Social Security Payouts

Claiming your Social Security benefits early may seem like a great idea. After all, 73% of beneficiaries opt to receive their benefits starting around the age of 62. However, waiting until later may be better in the long run and increase your benefit payouts. Our professionals want to help you maximize your benefits. After all, we here at Royal Legal Solutions understand just how hard you worked to earn those benefits.

Get Serious About Protecting Your Real Estate Investments

Get Serious About Protecting Your Real Estate Investments

I want to congratulate you on taking the tine to become the best real estate investor you can be. At Royal Legal Solutions, we're committed to make sure you have the best tax and legal information to make the most money you can. Visit us at our website at royallegalsolutions.com at the website and phone number below you'll always be able to reach us. Schedule a consultation, get the information, and make some money.

What is Fraudulent Transfer?

What is Fraudulent Transfer?

[00:08] If you're thinking of waiting to set up your LLC structure duct, the fact of the matter is that if you're sued, it's already too late. Transfers after the fact of even when a lawsuit is threatened before it's even filed can be considered a fraudulent transfer and a fraudulent transfer of doesn't mean necessarily that you did anything that was shady. All it really means is that you transfer the property outside of the normal course of business, so it means that you have $100,000 property. You would have to have sold it for $100,000 to somebody. You can't sell it to your niece for a dollar thinking that you're going to be able to protect it. The law favors the proactive in the sentence. You need to move all the properties before you ever think that there's going to be a problem with potential lawsuits. Don't think that waiting is going to be an appropriate measure in this circumstance. Contact specialist, call us at royal legal solutions. We can give you a consultation to be able to let you know what you should do for your particular circumstance. My name is Scott Smith. I'm an asset protection attorney in Austin, Texas. I'm a real estate investor and I want to help you.

[01:23] Hey, thanks for watching this video. If you want more high quality content just like this, you can find it here on our youtube channel are going to our website, royal legal solutions.com we have a ton of free content from our blogs or videos, the podcasts that I had been featured on. Whatever question you have, we're going to have it there for you for you.

Limitations for Canadian Investors

Dear Real Estate Investor: Lawsuits Are a Money-Driven Business

 

[00:07] As a real estate investor, you have to understand that lawsuits are a business and anybody's looking to sue you. They're looking to get money out of you. I've proper asset protection strategy keeps you from going from finding out what you own and if they ever were to see you, it limits what they can get to, but more importantly, a great asset protection strategy exhausts their will and the resources to fight you. This keeps people from continuing with the lawsuit. It gets them to settle early. It gets them, in most cases, to stop the lawsuit before it even starts. What you have to understand is that because law suits our business, the main part is how do we get money out of somebody when we sue them. This is what an asset protection strategy fights. Since it protects the assets from being seized by somebody via judgment, then that person doesn't believe that they're going to get anything out of their investment in a lawsuit because you see lawsuits only paid for in two ways.

[01:12] It's either I pay an attorney to sue or that the attorney takes it on contingency. But if in my research of the individual, I find out that they have no assets that it looks like on paper, then they qualify for food stamps. How much money am I willing to risk for a judgment which is merely a piece of paper without an asset to be able to seize a judgment is worthless. Moreover, there is no attorney that's worth his salt that ever going to take a case like that on contingency, which is free for the client and the attorney risks everything. Attorneys only take sure fire cases that they are very confident that they can win and collect on. So when you ask yourself, how do I protect myself from a lawsuit, which you should really be asking yourself is how do I make it look like I don't own it? My name is Scott Royal Smith. I'm with royal legal solutions and I'm an asset protection attorney for real estate investors and I'm a real estate investor myself, and I'd like to help you

[02:16] if you thought this content was good, you have to go see the bigger pockets podcast that I did. It was the top 10 things every real estate investor has to know about asset protection, and you can go listen to it right here.

The Only Two Ways to Lose Money Real Estate Investing: Lawsuits and Bad Investments

The Only Two Ways to Lose Money Real Estate Investing: Lawsuits and Bad Investments

[00:08] Real estate investors lose money in two ways. The first is because they actually made a bad investment. The second is because somebody took it from them and they can do that easily through a lawsuit and lawsuits are basically just legalized stealing. So one of the key things that we have to do to guard against half of the way that we will lose our money in real estate investing through litigation is protect ourselves from that. That's what an asset protection strategy is. A proper asset protection strategy protects you from those lawsuits. It protects you from anybody looking to try to sue you. Now when we look at how does that do that is because if your assets are held properly and compartmentalized inside of an LLC structure, it greatly diminishes somebody, his desire to want to sue you. We do this because we start taking them into the deep waters.

[01:04] We start exhausting their will and their resources to fight because if we make it look like you don't have much to come after and we make it look like it's very tough to get to and it actually will be very tough again, then the person on the other end of that says, how much am I willing to invest and put up my hard earned dollars with just the hope or the chance that I might be able to get something out of it? Most people won't put their hard earned dollars on a gamble just like they were going to Vegas to go for a lawsuit, and in fact the last, the attorneys to take the case on contingency. Well, what I can tell you is that attorneys are only taking cases on contingency because they believe that it's going to be an easy win for them because that's their business and we make it a gamble or somebody to come after your hard earned dollars and your real estate investments. The reality is is that it won't make business sense and they just won't do it. My name is Scott Smith and I'm an asset protection attorney specializing in real estate asset protection. I'm a real estate investor myself and I'd like to help you

[02:28] if you thought this content was good, you have to go see the bigger pockets podcast that I did. It was the top 10 things every real estate investor has to know about asset protection, and you can go listen to it right here.

How to Start a Self-Directed IRA With an LLC

How to Start a Self-Directed IRA With an LLC

[00:07] People will tell you that your IRA is safe and their raw, your IRA is only safe from lawsuits against you and somebody's coming after your IRA. But your Iras invested in an asset class such as real estate where it can be sued. The IRA itself is exposed. Also your IRA is exposed in the sense that it can be disqualified if any of the transactions of the IRA are expert. So there's two things that we do. The first thing that we do is we can split up multiple IRA accounts. So that way if any one type of investment, uh, is disqualified or has some type of issue, um, that I, that the IRS would look at, well that limits your exposure because it's only that one account that we have to worry about. The second thing that you can do is set up a self directed IRA with an LLC. Read about the benefits of self directed IRA here.

[00:57] I like to do it with a series LLC, but that allows us to do is if you look at our videos regarding the series LLC structure, we can take each different asset belonging to the IRA and put it into its own series. So that way if there's an issue with acid a, it doesn't affect acid, B, c, d, et cetera. And this way, if you have one property that has a lawsuit against it, somebody that can't take your entire IRA amount, they could only take a very limited amount of that structure. So make sure that your IRA is properly structured with asset protection because it's not by default, the safest way to do it. My name is Scott Smith. I'm an asset protection attorney with real estate. I'm a real estate investor myself. I want to help.

[01:40] Yeah,

[01:46] we're not like a normal law firm. We believe in putting out only high value content that's going to help you directly. You can get it on our youtube channel. You can get it on our website, or you can listen to all the different podcasts that I do. I am constantly putting out information because I know that this is going to make me the most valuable person in your life. Go check it all out right here.

[02:07] Good.

How to Maintain the Records and Accounting of a Company

How to Maintain the Records and Accounting of a Company

Why file an LLC and manage your company that way if it's just going to get invalidated anyway? Can't a good litigation attorney just pierce an LLC? That advice is just wrong. It's not true. LLCs are incredibly hard to pierce if they are maintained correctly. The problem is that most people, your average Joe Plumber that's running their company, doesn't do the things that are necessary to maintain the adequate corporate structure. So what are the things that you need to keep in mind? The first thing you need to keep in mind is that you must maintain records and an accounting of your company. What is the money that's coming in? What is the money that's being spent? You need to run everything through a bank account for your company so it has the appearance of being a legitimate, separate entity from yourself. You cannot treat the money of the company as if it were your own piggy bank. This means that in the accounting of your company, if you ever need to take money out, you must keep an accounting of it as a dividend from the company. If you fail to do these steps, the corporation can get pierced. If the corporation is pierced, it provides no protection. However, if you were diligent in maintaining adequate records of the company, you will be protected. My name is Scott Smith. I'm an asset protection attorney out of Austin, Texas. I want to help protect you.

The Royal Legal Solutions Commitment

The Royal Legal Solutions Commitment

I want to congratulate you on taking the tine to become the best real estate investor you can be. At Royal Legal Solutions, we're committed to make sure you have the best tax and legal information to make the most money you can. Visit us at our website at royallegalsolutions.com at the website and phone number below you'll always be able to reach us. Schedule a consultation, get the information, and make some money.

Why a Registered Agent Is Required For Every LLC

Why a Registered Agent Is Required For Every LLC

A registered agent is required for every LLC in every state that it does business. The only reason for the registered agent to even exist is because if someone wants to sue your LLC, and they're not able to get to a member or manager personally to be able to serve them. Then this allows them to serve the lawsuit onto the Secretary of State and be able to have a person that must receive service of process or the lawsuit. Typically, these services are able to be engaged for anywhere from between 40 and $75 per year online. And they're all fungible, meaning that they're all the same, no matter where you go. So I always recommend saying, what's the best deal that you an get, and be able to go with that. My name is Scott Smith, I'm an Asset Protection Attorney at Austin, Texas. I'm a real estate investor, and I wanna help you.

What Is a Charging Order?

What Is a Charging Order?

So I'm a real estate investor. I have my properties properly structured inside of an LLC. And out of the blue I got into a car wreck. And this resulted in a judgement against me because it exceeded the limits of liability of my auto policy. Now they have tried to record that judgement against my LLC. Can they take it? The answer is no. This is part of the protections that an LLC gives you. It allows you to be able to know that your assets are gonna be protected from the personal actions that you take in your day to day. You'll know the exact laws that'll happen inside of your particular state. Because it'll be under the heading of what's called a charging order. In most states, the way it works is that they can't take your membership interest in the LLC, they can't take over a management function, they can't force you to sell the assets of your LLC. What they can do is put a lien against your LLC. So that way, if there's any distributions from that LLC to you that it goes to your creditors. There's ways around this if you ever end up in that situation. One of the ways that we would think to do that, is by selling your interest in the LLC to another party. But you always want to keep that in mind with what's gonna happen in your particular state. With what's known as the charging order. Look it up, make sure you know those laws whenever you're setting up your LLC to know exactly what the limits are of your liability there before you end up setting up your structure. My name is Scott Smith, I'm an asset protection attorney specializing in real estate. I'm a real estate investor myself and I wanna help you

Judgment-Proof

Judgment-Proof

This might sound strange to you as a real estate investor, but you're in one of the most high-risk industries in the United States. The United States is already a very litigious country, and real estate is the most litigated of all of those industries. You're exceptionally at risk if you hold any assets in your personal name. What we specialize at Royal Legal Solutions is making you what's known as judgement proof. That means if anybody sues you, they get nothing.